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HomeMy WebLinkAbout01-Workshop CALIFORNIA STATE SENATOR BOB DISTRICT h, 12/14/2007 Dutton Report Special: Governor to Declare Fiscal Emergency I am pleased to tell all of you that Governor Schwarzenegger realizes the seriousness of the state's fiscal situation and announced today that he will declare a fiscal emergency when the Legislature reconvenes in January. During a press conference in Long Beach today the governor said, "We are going to call this January for a fiscal emergency when the legislators come back," Schwarzenegger said. "We will make that announcement next week some time with the legislative leaders. We will address that." I have been urging the governor to declare a fiscal emergency for the past several weeks. I felt that the budget deficit growing from a projected $6.1 billion to now $14 billion met the requirements of Proposition 58. Passed by the voters in 2004, Prop 58 gives the governor the authority to declare a fiscal emergency in order to deal with budget issues sooner rather than later. I believe that unless we have our fiscal house in order we cannot effectively deal with any of the other critical issues facing California including health care. So I applaud the governor for realizing that it's better to deal with the growing budget deficit now rather than later. I look forward to coming back in January, rolling up my sleeves, and working with Republican and Democrat colleagues to make the adjustments necessary to bring state spending in line with revenues. Here's a link to my website to read and view what I've been saying about the budget and declaring a fiscal emergency for the last several weeks: http://republican.sen.ca.gov/web/31/ For more information about Senator Dutton or to sign up to receive his electronic newsletter,feel free to visit his website at: http://republican.sen.ca.gov/web/31/ Entered into Record at Co(!4jcillcmyDevcros Mtg: ,C� ,-r' - re Agenda Item � City ClerkICDC Secy City of San Bernardino CALIFORNIA STATE SENATOR BOB DUTTO PROUDLY SERVING THE 3 1 ST DISTRICT Dutton Report: December 2007 Budget Deficit Now $14 Billion For the last several weeks I've been urging the governor and legislature to take whatever steps are necessary to begin addressing the state's budget situation that seems to be getting worse by the day. Since the passing of the 2007-08 budget the situation has only gotten worse. In November, the non- partisan Legislative Analysts Office released figures that indicated the 2008-09 budget deficit would reach $10 billion— up from the original projection of$6.1 billion. During a budget hearing in late November I asked some tough questions of the Legislative Analysts Office and the Department of Finance. I asked if they would be surprised if the deficit for 2008-09 reached $14 billion. Both representatives didn't answer the question directly, but low and behold,just two weeks following that hearing the Department of Finance has announced the 2008-09 budget deficit will be about$14 billion. I believe the budget situation in California has reached the stage where immediate action is necessary. In 2004, the governor asked the people of California to pass Propositions 57 and 58 in order to give him the tools to deal with the huge budget deficit he inherited when he took office in late 2003. Proposition 57 authorized the state to borrow $15 billion dollars to deal with past deficits. Proposition 58 was also passed by the voters and gave the governor and the legislature the authority to prevent our budget problems from spiraling out of control. Under Prop. 58, if the governor determines that the state is facing a fiscal emergency he may call the legislature into a special session. The governor is then required to propose legislation to address the problem. By any reasonable definition, a budget deficit that has grown from a projected $6.1 billion to $14 billion over the course of just a few months is a fiscal crisis. I believe we must address the fiscal crisis facing California now. I'm asking the governor to declare a fiscal emergency and propose the necessary legislation to fix the problem. We should not wait any longer to deal with this problem because it continues to grow by the day. Wastewatchers Update In the coming weeks and months as the budget takes center stage, you're going to hear cries from all levels of government that there isn't any way possible to reduce their budget and the only way to solve this situation is to raise taxes. I say they are wrong and each month I provide examples chronicled in newspapers around the state of wasteful spending that show how our tax dollars are needlessly squandered. The governor has asked all state departments to come up with a spending plan that would reduce their spending by 10 percent and I believe that goal is completely within reach, especially if the departments would go after those who commit fraud, waste and abuse with your tax dollars. Rest assured that as this budget fight moves forward, I still believe the state of California has a spending, not a revenue problem. We do not need to consider raising taxes to cover the state's spending addiction. I would also point out that despite the projected $14 billion deficit every department has areas where they are already operating at a level below where they believe they should be. Here's this month's latest example of wasteful spending. It appears that some California lawmakers have been watching too many Disney movies lately. A recent decision leads us to believe that they view local animals to be as human as the wisecracking, emotional animal characters in Disney movies. As a result, transportation money is being spent on four- legged travelers rather than those on four-wheels. According to the Los Angeles Times ( October 10, 2007), "a proposal for a $455,000 animal path over the 405 Freeway has riled residents...."The overpass is strangely not winning over the locals. "[They]say scarce transportation dollars should not be used to help deer and bobcats get around while humans remain stuck in endless traffic."Have people forgotten that animals hate getting stuck in traffic, too? The overpass won't rile the animals, as they won't even have to see the cars below- "traffic makes creatures skittish,[so]the bridge plan includes a 5-foot-high wall to block their view of the freeway and a 3-foot wall blocking their view of the bridge roadway."Nice thoughts, but how will they even know to use the overpass?A local resident asked, "`What are they going to do, have Doctor Doolittle standing there directing animals to the bridge?"'If Dr. Doolittle can't, someone could hire The Lion King's Mufasa to authoritatively direct the animals. A magical kingdom full of animals could merit the construction of this overpass but, "[a biologist]said wildlife surveys show that at any time, there are about 15 bobcats between the 405 and 101 freeways, possibly 30 to 35 bobcats west of the 405 as far as Topanga Canyon and 135 to 160 deer in areas on both sides of the freeway."It doesn't sound like there are enough Bambis and Simbas to need an overpass. Instead, there surely are enough people who would be happy to sleep, sell drugs, and do other unspeakable acts in the safe confines of the overpass, scaring potential animal crossers away. Other statistics challenge the need for the overpass. "There are other spots where animals can cross under or over the freeway...and `there is no documentation that animals are using them."' Have these lawmakers been around wild animals before? You don't have to be an expert to know that they are threatened by people and loud, moving vehicles. After all, opposition to the overpass has said, "[t]he secret of success is not expecting animals to behave like people." Obviously, the concept of an animal overpass is not reality-based, will not work, and should be stopped. If only the people who voted for the overpass could prioritize like Senator Margett (R-Arcadia): "We've got to take care of people first."Our transportation bonds are being aimlessly spent like fairy dust on animals misperceived to be humanlike. It's time for government to leave the world of make believe and spend tax dollars responsibly. Protect Your Identity This Holiday Season With less than two weeks before Christmas, many people will be shopping to purchase gifts for family and friends. The California Bankers Association has released five ways to help prevent to ID theft by reducing your exposure. Don't carry your Social Security card or print your Social Security number or driver's license number on your checks. Pre-printing this valuable information on checks only makes it easier for thieves to use your checks without your knowledge. Get a mailbox that locks. This will prevent thieves from stealing incoming or outgoing mail with important identifying information. Carry only the credit card you intend to use and leave the others at home in a secure place. It is easier to cancel a single credit card than all of your cards if your purse or wallet is stolen. Watch anyone who "swipes" your credit card. Devices known as "skimmers" are sometimes used by counterpersons to copy the identifying information off the magnetic strip of your credit card onto a fake credit card later. Check your credit report at least twice a year. Doing so will keep you aware of how your credit is being accessed and by whom, making it easier for you to identify possible instances of identity theft. Merry Christmas and Happy New Year As most families get ready to gather and celebrate Christmas, I would like to take this time to wish all of you a very Merry Christmas and Happy New Year. I would like to thank all of you who stopped by my office open house on Dec. 12 to donate a gift to the Toys for the Troop's Kids, or any of the other worthy charities gathering gifts to help the needy this holiday season. And as we gather with family and friends this year, I'd ask you to take a few seconds and remember all those brave men and women serving our country overseas, protecting the values and rights we all take for granted. I am proud to represent the 31st District in the California State Senate and my promise to each and every one of you this year is that I will continue to represent your interests in 2008 and as long as I have the honor to be called your State Senator. Around the District • Everyone loves a parade. I have had the wonderful opportunity to participate in 3 parades over the last couple months—the annual Loma Linda Community Parade, the Founder's Day Parade in Rancho Cucamonga, and the annual Redlands Christmas Parade. My wife Andrea and I sincerely enjoy the opportunity to participate in these events and to be able to share some time with the terrific people in these communities. d Y'. MKS" I '"` ♦ ' d t ..,1� Senator Dutton and his wife,Andrea at the Founder's Day Parade a, .gyp Senator Dutton at the Loma Linda Parade • On September 28, 1 joined with other local officials in the ground breaking for the new Live Oak Canyon and Interstate 10 Interchange. I am truly pleased to see infrastructure projects like this one move forward. This interchange will help ease traffic flow in the area and help local commuters spend more time at home with their families instead of being stuck on the road. • 1 am very proud that on October 19, my lovely wife Andrea was honored with the award as a "Latino of Distinction"for Education. In her role as head of the Radiology Department at Chaffey College, Andrea is instrumental in helping students achieve success in their chosen career path, as well as partnering with local hospitals and medical centers to create more opportunity for these students. • On November 2nd I was able to host a Bond Workshop providing local city and county department heads with information on the funding opportunities through Propositions 1 C, 1 E and 84. This was actually a follow up to the workshop we held in August. Representatives from Housing and Community Development, Tracie Billington, and the Department of Water Resources, Chris Westlake, were on hand to provide updated information. sue: 1 Senator Dutton addresses the Bond Workshop • On Thursday, November 15, 1 joined with Golden State Water in providing 150 turkeys to the GAP (God Always Provides) Food Bank. These turkeys are distributed to local families who otherwise would not have the means to celebrate the Thanksgiving Holiday with a bountiful meal. My sincere thanks goes out to Golden State Water and to Peri Blackman, Director of the GAP Food Bank. k J IW Senator Dutton with Peri Blackman and other volunteers at the GAP Food Bank • On November 5th, I participated in Mobility 21, the 6th Annual Southern California Transportation Summit. As most of you are aware, transportation has been one of my top priorities and it was gratifying to be able to join with other state and local officials in sharing current information on transportation needs and programs with local individuals and businesses. • During this portion of the legislature's calendar, I am able to take the time to meet with the many cities and local Chambers of Commerce in the 31st District. It provides a great opportunity to provide information, discuss the issues, and share ideas, which helps me to represent all of you to the best of my ability. Thank you for taking the time to make these opportunities available to me. Quote of the Month "Merry Christmas to all and to all a good night." Entered into Record at Coll 11 11CmyDevCms Mtg: /1-h/ � ! 1 by re Awenda Item City Clerk/CDC Secy City of San Bernardino 1 W rti (•; p � * DEPAR-FIVIENT 0P e. FINANCE— An"OL_D `OJIWARZENECOEa, ~c„''��r,� Goer-.a Nn a lC:: F I '7' 3T.Ati (. .\t'•�'r l'i�. a it:::l fns.. i �°', ■ FiAi'[%/AMC N'' L” CA V`°i h9 i:!•<}9!B WWw,(-,n r.f.n,[py Fnx!=rpd into Record at / December 10, 2007 " `fgpvCms Mtg: Honorable Michael Machado, Chair ;da Item .. Senate Budget and Fiscal Review Committf:e No, 4 State Capitol, Room 5066 Sacramento, CA 95814 !� Dear Senator Machado: City ClerkICDC Secy City at San Berar-ardir7r Proposition 18 Local Streets and Roads Funding This is in response to your request at the December 3, 2007 subcommittee hearing for a date as to when forms to apply for Proposition 18 fi.mds for local streets and roads will be available to cities and counties. I understand that cities and counties are anxious to receive their allocations and that your subcommittee has a strong interest in getting the funding out as quickly as possible. I also think it is important that the committee and the cities and counties understand the efforts of the Department of Finance (Finance) ar.d others to accomplish the same goal. Assigning an administrative function to Finance was a very last minute amendment to SB 88, which provided direction for implementing many of the Proposition 16 programs. After that, conflicting provisions were reconciled and other changes were made in AB 193 and AS 196. No resources were provided to Finance to accomplish this work. It has been done by budget staff in conjunction with their normal responsibilities for developing the Governor's Budget. Much has been accomplished since the last bill was chaptered October 8, 2007; in fact, compared to most new programs, progress has been rapid. There is much more to the process than simply developing a form —developing a design for public accountability, identifying costs, determining allocations, and arranging financing. In early discussions with representatives of the cities and counties, the focus was on getting the funding out as early as possible. Finance staff moved quickly to develop a prototype form and shared it with the California State Association of Counties and the League of California Cities. There was much good collaborative work over several weeks to develop something local agencies could easily use and meet state accountability goals. We are using a spreadsheet to be emailec to local officials and returned in the same fashion to ensure security and consistency Of data collection. This avoids having to delay the program to deveiop a secure, on-line, web- based application for plan input by local government. We will use the spreadsheet for Finance's plan reviews, so we can quickly approve them. Later, the spreadsheets will be used to input documents into a database that will provide extensive data on the state's bond accountability website. At the time, we thought we might be able to have something ready by the end of C sober. That proved to be overlyiogtimistic, and had the unfortunote effect of raising the expectations of the cites and counties. D I L 1 2 2G07 Honorable Michael klachado . December 10, 2007 Page 2 Another major part of the process has been to arrange the financing needed in order to have funds available once city arid county plans have been approved. SB 88, however, did not assign traditional responsibilities to the State Controllers Office (SCO)or Finance, and a number of issues had to be worked out between the two entities and the State Treasurer's Office(STO), Using bond funds for some projects and maintenance activities that will have a useful life of less than 12 years has presented its own challenges, Nevertheless, with Finance taking the lead to resolve these issues, I am pleased to report that the STO was able tc sell $445 million in bonds last week to fund the first wave of allocations, and that the mechanisms are now in place to meet additional cash needs later in the current fiscal year at a very ,ow financing cost. Another essential 3spc,ct of developing the program has been developing the bond information website consistent with the accountability provisions in SB 88 and the Governor's Executive Order regarding all bond financing. The Department of Transportation (Caltrans) has been developing and refining a new website to track all Proposition 1 B expenditures and accomplishments. In order to minimize time and costs, Finance has worked with Caltrans to make sure that plans submitted and data reported electronically by cities and counties for local streets and roads expenditures will be compatible with the Proposition 1 B website. This work has taken more time than we initially thought, in part because both Caltrans and Finance are doing this work with existing staff. We believe we are very close to completing the changes needed to our input form to meet the requirements of the website. iNhile there never has been any intent to hold up release of the input forms until the website is fully functional. we obviously have to know that the form will work before it can be released. To do otherwise with plans and data from 536 local entities would risk having to make multiple data requests and substantially Increase work for both locals and the state. SIB 88 also allows for 3 percent of ti-e bond funds for local streets and roads to be used for administrative arid issuance costs. These costs must include all costs over the life of the bond, not just the first year. Three percent in this case would be $28.5 million. We could have chosen to have withheld this amount off the top and instructed the SCO to calculate the allocations accordingly, but believe such an approach would be detrimental to everyone's goal to fund as many local projects as possibic. Realistically we believe costs will be more in the $2 million range. VVe are refining that number as par ;cf the budget development process with the SCO and the STO. who control significant components of these costs. The problem has net been that the process has taken too long, but that expectations had been unrealistically ra scd, We believe we wiii be able to develop a responsible program that maximizes the amount of resources available to benefit:the public and send out instructions and forms to cities and counties by January 15, 2008. Honorable Michael Machado December 10, 2007 Page 3 If you have any questions, please contact Mark Hill, Program Budget Manager. at 322-2263. MICHAEL C. GENEST Director By: VINCENT P. BROWN Chief Deputy Director cc: Honorable Bob Dutton. Senate Budget and Fiscal Review Committee No, 4 Honcrable Christine Kehoe, Senate Budget and Fiscal Review Committee No. 4, Ms. Elizabeth Hill, Legislative Analyst Mr. Brian Annis, Consultant; Senate Budgel and Fiscal Review Committee Ms. Rocel Bettencourt, Consultant, Senate Republican Fiscal Office I